[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1181 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 1181
To amend the Federal Deposit Insurance Act to improve financial
stability, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 18, 2023
Mr. Reed (for himself and Mr. Grassley) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act to improve financial
stability, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bank Management Accountability
Act''.
SEC. 2. SYSTEMIC RISK DETERMINATION.
(a) In General.--Section 13(c)(4)(G) of the Federal Deposit
Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended by adding at the end
the following:
``(vi) Recoupment of compensation from
senior executives and directors.--
``(I) In general.--The Corporation,
as receiver or conservator of an
insured depository institution under
clause (i), may recover from any
current or former senior executive or
director of the insured depository
institution, or of a covered affiliate
with respect to the insured depository
institution, who is substantially
responsible for the failed condition of
the insured depository institution, any
compensation received during the 2-year
period preceding the date on which the
Corporation was appointed as the
receiver or conservator of the insured
depository institution, except that, in
the case of fraud, no time limit shall
apply.
``(II) Cost considerations.--In
seeking to recover any compensation
under subclause (I), the Corporation
shall weigh the financial and deterrent
benefits of that recovery against the
cost of executing the recovery.
``(III) Personal liability.--Any
liability insurance policy for a senior
executive or director described in
subclause (I) shall exclude from
coverage any liability under this
clause.
``(vii) Prohibition authority.--
``(I) In general.--The Corporation
may take any action authorized by
subclause (II), if the Corporation
determines that--
``(aa) a senior executive
or a director of an insured
depository institution with
respect to which the
Corporation has taken action or
provided assistance under
clause (i), or of a covered
affiliate with respect to such
an insured depository
institution, before the
appointment of the Corporation
as receiver or conservator,
has, directly or indirectly--
``(AA) violated any
law or regulation;
``(BB) violated any
cease-and-desist order
that has become final;
``(CC) violated any
condition imposed in
writing by a Federal
agency in connection
with any action on any
application, notice, or
request by the insured
depository institution
or covered affiliate
(as applicable) or the
senior executive or
director (as
applicable);
``(DD) violated any
written agreement
between the insured
depository institution
or covered affiliate
(as applicable) and the
Federal agency
described in subitem
(CC);
``(EE) engaged or
participated in any
unsafe or unsound
practice; or
``(FF) committed or
engaged in any act,
omission, or practice
that constitutes a
breach of the fiduciary
duty of that senior
executive or director;
and
``(bb) by reason of the
violation, practice, or breach
described in any subitem of
item (aa), that senior
executive or director has
received financial gain or
other benefit, and that
violation, practice, or breach
contributed to the failure of
the insured depository
institution.
``(II) Authorized actions.--The
Corporation may serve upon a senior
executive or director with respect to
whom the Corporation has made a
determination under subclause (I) a
written notice of the intention of the
Corporation to prohibit any further
participation by that individual, in
any manner, in the conduct of the
affairs of any financial company for a
period of time determined by the
Corporation to be commensurate with
that violation, practice, or breach,
except that such period shall be not
less than 2 years.
``(viii) Definitions.--In this
subparagraph:
``(I) Compensation.--The term
`compensation' means any direct or
indirect financial remuneration
received from an insured depository
institution, or from a covered
affiliate with respect to an insured
depository institution, including
salary, bonuses, incentives, benefits,
severance pay, deferred compensation,
golden parachute benefits, benefits
derived from an employment contract or
other compensation or benefit
arrangement, perquisites, stock option
plans, post-employment benefits,
profits realized from a sale of
securities in the insured depository
institution or the covered affiliate
(as applicable), or any cash or noncash
payments or benefits granted to or for
the benefit of a senior executive or
director.
``(II) Covered affiliate.--The term
`covered affiliate' means, with respect
to an insured depository institution,
any--
``(aa) bank holding company
(as defined in section 2(a) of
the Bank Holding Company Act of
1956 (12 U.S.C. 1841(a))) that
controls the insured depository
institution;
``(bb) savings and loan
holding company (as defined in
section 10(a) of the Home
Owners' Loan Act (12 U.S.C.
1467a(a))) that directly or
indirectly controls the insured
depository institution;
``(cc) subsidiary of the
insured depository institution;
or
``(dd) affiliate (as
defined in section 2 of the
Bank Holding Company Act of
1956 (12 U.S.C. 1841(k))) of
the insured depository
institution.
``(III) Director.--The term
`director' means a member of the board
of directors of a company, or of a
board or committee performing a similar
function to a board of directors, who
has authority to vote on matters before
the board or committee.
``(IV) Financial company.--The term
`financial company' has the meaning
given the term in section 201(a) of the
Dodd-Frank Wall Street Reform and
Consumer Protection Act (12 U.S.C.
5381(a)).
``(V) Senior executive.--The term
`senior executive'--
``(aa) means any individual
who participates or has
authority to participate (other
than in the capacity of a
director) in major policymaking
functions of a company,
regardless of whether the
individual has an official
title or the title of the
individual designates the
individual as an assistant; and
``(bb) includes the
chairman of the board, the
president, any vice president,
the secretary, the treasurer or
chief financial officer, the
general partner, and any
manager of a company, unless
the individual--
``(AA) is excluded,
by resolution of the
board of directors, the
bylaws, the operating
agreement, or the
partnership agreement
of the company, from
participation (other
than in the capacity of
a director) in major
policymaking functions
of the company; and
``(BB) does not
actually participate in
major policymaking
functions of the
company.''.
(b) Regulations.--The Federal Deposit Insurance Corporation shall
promulgate regulations to administer and carry out this section, in a
manner that is not less stringent than the manner set forth in section
380.7 of title 12, Code of Federal Regulations (as in effect on the
date of enactment of this Act).
SEC. 3. ORDERLY LIQUIDATION AUTHORITY.
Title II of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5381 et seq.) is amended--
(1) in section 210(s) (12 U.S.C. 5390(s)), by adding at the
end the following:
``(4) Personal liability.--Any liability insurance policy
for a senior executive or director described in paragraph (1)
shall exclude from coverage any liability under this
subsection.''; and
(2) in section 213(b) (12 U.S.C. 5393(b))--
(A) in paragraph (1)(C), by inserting ``and'' at
the end;
(B) in paragraph (2), by striking ``; and'' and
inserting a period; and
(C) by striking paragraph (3).
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